Bitcoin emerged in 2008, and presented the world with a digital currency that was based upon a groundbreaking blockchain technology that utilized a distributed ledger system. This helped produce a new monetary system that did away with centralized control and helped moved the world towards the adoption of trustless technologies. Despite still being under 10 years old, the blockchain system that Bitcoin uses may already be extinct due to the development of Hashgraph technology.
What is Hashgraph?
Hashgraph is a new approach that greatly differs to other interpretations of the distributed consensus and looks to provide an upgrade to the current systems of distributed ledger technology (DLT). Hashgraph can resolve today’s scaling and security issues, while also pushing the use of distributed consensus applications into new areas.
Essentially, Hashgraph is a data structure and consensus algorithm that is faster, fairer, and more secure than blockchain. It uses two special techniques in order to outperform the blockchain. These include:
- Gossip about Gossip
- Virtual Voting
Gossip about Gossip involves attaching a small additional amount of information to a pair of hashes (Gossip) that contain the last two people talked to. By doing this, a Hashgraph can be built and updated whenever additional information is gossiped, on each node.
When the Hashgraph is ready, we are also aware of the information that each node has and exactly when they knew it. As a result, it becomes straightforward to know how a node would vote and this data can be used as an input to the voting algorithm and to find whichever transactions have reached consensus quickly.
Hashgraph vs Blockchain
Blockchain technology operates as reliable digital ledger that can be used to record financial transactions, ownership, and almost everything of value. Any information held on a blockchain is shared across its existing network and is consistently updated and also incorruptible. This system ensures that data is not stored in any individual location, and that the blockchain cannot be controlled by any single entity.
Consensus technologies have generally been put into the following two categories:
- Public networks such as Bitcoin and Ethereum.
- Private networks using leader based consensus algorithms.
As we have seen with Bitcoin, public networks can be expensive to run and have a number of efficiency issues tied to the Proof of Work mechanism. Private networks are more cost efficient and boast higher performance capabilities as they restrict usage to known and trusted participants. However, these networks are susceptible to DDos attacks whenever security standards are not maintained.
Hashgraph is proven to be fully asynchronous Byzantine. This means it makes no assumptions about how fast messages are passed over the internet and this makes it resilient against DDoS attacks, botnets, and firewalls.
The Hashgraph algorithm works without needing to use the Proof of Work or Leader systems, and can also deliver low-costs and high performance levels without a single point of failure. Hashgraph does away with the need for extensive computation and energy consumption and improves on the performance statistics of the Bitcoin network. Bitcoin operates at a maximum of 7 transactions per second. While Hashgraph is only limited in relation to bandwidth and allows for over 250,000 transactions per second.
In addition to this, Hashgraph also allows more a fairer system of operations as currently, miners can choose the order for which transactions occur in a block, and can even delay orders by moving them into future blocks, or even stop them from entering the system if necessary. Hashgraph utilizes consensus time stamping and prevents any individual from changing the consensus order of transactions by denying the ability to manipulate the order of transactions.
Despite its obvious benefits, Hashgraph has some way to go before it can boast of the network effects enjoyed by both Bitcoin and Ethereum. However, in the ever evolving world of blockchain technology it seems we are on the cusp of the next stage of evolution.